HONOLULU, Dec. 20, 2010 /PRNewswire-FirstCall/ -- Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank (CPB), today announced that the U.S. Treasury agreed to exchange the Treasury's TARP preferred stock, having an aggregate liquidation preference of $135 million, plus accrued and unpaid dividends, for CPF common stock valued at approximately 37.5% of the sum of the original par amount of the TARP preferred stock plus accrued and unpaid dividends. The number of shares of CPF common stock to be issued in the exchange is based on a price of the lesser of $0.50 per share and the lowest price per share issued in CPF's recapitalization plan. The Treasury's consent to an exchange on the terms described above is subject to the execution of a definitive exchange agreement and certain other terms and conditions.

CPF previously reported that the conditions of the definitive agreements it entered into with two lead investors on November 4, 2010, included the exchange of TARP preferred stock for common stock at a value of 25% of the aggregate liquidation preference of the TARP preferred stock and 100% of the amount of accrued and unpaid dividends and a price of $0.75 per share. Based on the terms of the TARP exchange agreed to by the Treasury, CPF amended the agreements with its two lead investors to reduce the purchase price of common stock from $0.75 per share to $0.50 per share, resulting in an investment amount of approximately $98.6 million by each investor.

"We are pleased to have accomplished a key component of our company's capital raising initiative," said John C. Dean, Executive Chairman of CPF and CPB. "We believe that moving forward with new capital is in the best interest of all of our shareholders, employees, and customers."

The closing of the recapitalization transaction is subject to raising the remaining $127.8 million of the $325.0 million capital raising plan, the exchange of the TARP preferred stock, regulatory approvals, and other conditions.

CPF has filed a Form 8-K with the U.S. Securities and Exchange Commission with respect to the foregoing.

About Central Pacific Financial Corp.

Central Pacific Financial Corp. is a Hawaii-based bank holding company with $4.2 billion in assets. Central Pacific Bank, its primary subsidiary, operates 35 branches, over 120 ATMs, and a residential mortgage subsidiary in the state of Hawaii. For additional information, please visit the Company's website at http://www.centralpacificbank.com.

Forward-Looking Statements

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